Karnataka notifies excise rule changes for e-auction of unused liquor licences

BENGALURU: The State government on November 3 issued the final notification on the amendment to the Karnataka Excise (General Conditions of Licences) Rules, 1967, Karnataka Excise (Lease of the Right of Retail Vend of Beer) Rules, 1976, and Karnataka Excise (Sale of Indian & Foreign Liquors) Rules, 1968, for e-auctioning of defunct/unused licences. The amendments have been made under Section 71 of the Karnataka Excise Act, 1965 (Karnataka Act 21 of 1966). The amended rules will now be called the Second Amendment Rules, 2025, in the above three categories. Two new license categories, CL-2A for CL2 (retail liquor shops) and CL-9A for CL-9 (bars & restaurants) have been created for the unused licenses under consideration for auction. The amendment to Rule 17-A (General Conditions of Licences) allows conditional transfer (of licence) in the event of death of the licensee or the lessee during the validity (currency) of the licence or lease or within a period of six months from the date of death of the licensee or the lessee. Approximately 579 unused licenses are likely to go under the hammer to aid in additional resource mobilisation (ARM) of around Rs 600 crore to the State. A majority of them are CL11-C (government-owned Mysore Sales International Limited -- MSIL retail outlets) licences followed by CL-2 and CL-9 licences. The state is said to have engaged MSTC Limited, a Government of India enterprise, to conduct these auctions through a transparent electronic (e-auction) system. The CL-2, CL-9, CL-11(C), CL-2A and CL-9A licences, which are not renewed within a period of six months from the commencement of Excise year, or, within a period of six months from the date of death of the licensee, are considered as lapsed and forfeited. Such licences shall not be eligible for renewal, and no rights shall accrue to the licensee in respect thereof, such licences shall fall into the auction pool for auctioning, read the amendment notification. Meanwhile, the Federation of Wine Merchants Associations of Karnataka has claimed that the number of licences identified for auction is significantly lower than the governments estimate of around 579. Many of these were previously allotted to MSIL in 2009 and hence cannot be auctioned, the Federation had argued.